On Monday, Expert Global Solutions (EGS) announced that it would divest certain parts of its accounts receivable management (ARM) business to well-known private equity firm Platinum Equity. The tagline of their joint press release stated that the “business expected to operate as TSI,” effectively removing the name NCO from the U.S third party ARM industry as far as we can tell.
For more than a year, EGS was making moves with its third party debt collection businesses in the U.S. that attracted the attention of many other ARM companies and recovery managers throughout the industry. These moves raised a lot of speculation that EGS was downsizing parts of its collections business but the company was doing so in a way that would not attract too much attention.
EGS publicly proclaimed that it will be getting out of U.S. third party collections altogether by selling off Transworld Systems, Attorney Network, Education, Healthcare Bad Debt, Government and U.S.-based Third Party Collections. The release also went on to note that the new entity formed from the combination of these business units is expected to operate under the name Transworld Systems, Inc., not NCO Group. Does this mean that when this transaction is completed the name NCO will no longer exist in the U.S. third party ARM industry or will it continue in some capacity within EGS? I guess we will find out soon.
In the interim, the announcement on Monday will certainly strike a chord among many credit and collection professionals across the U.S. Since its successful public offering nearly 20 years ago, NCO was viewed as a bellwether in the industry with its monster size acquisitions of FCA International, OSI and RMA to name a few that catapulted it from a small business into pole position as the largest ARM company in the world. One thing is now clear. NCO as we came to know will no longer exist.